Dave Ramsey says: 4 things new college graduates should do to be money smart

I just graduated from college, and I’ll be starting my first real job soon. What can young adults, who are just getting started, do to avoid money problems now and in the future?

— Ben

Dear Ben,

Congratulations! I’m glad you realize the importance of being responsible with your money and planning for things down the road.

There are three or four important things a recent college graduate — or anyone, really — can do to make the most of their money and protect themselves financially.

The first is to always live on budget. When you write down a budget on paper, and give every dollar a name before the month begins, it helps you know what your money is doing instead of leaving you in a situation where you’re wondering where it went.

Two more important practices are saving money and staying out of debt.

Your income is your biggest wealth-building tool. When you’re saddled with debt, your money goes to creditors instead of into your pocket.

Saving money prepares you for all the things life will throw at you — both good and bad.

One more thing I’d include is investing.

I know you’re young, but you still need to think about life after retirement. If you start investing just a little bit each month now in good mutual funds, you could easily retire a millionaire.

These are all very simple, basic things, Ben, but they’ll make a huge difference in your financial situation now and in the years to come!